Do the Big three deserve a second chance???

This is a discussion on Do the Big three deserve a second chance??? within The International Automotive Scene, part of the BHP Worldwide category; Nashuatelegraph.com: Ten myths related to Big Three bailout
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Arrogance just does not pay. I seriously don't know if the top management was misled into focusing on the wrong segment and type of vehicles they produced. But they never even tried to rectify the problem.

Also going in jets to get a bailout was such a bad move. Then they go in Hybrid cars the second time to prove that they are cutting down on costs. Who are they trying to fool?

I am not surprised that the bailout package got rejected. There are no hard commitments that they have made and they need to get leaner and meaner to get going again.

Can you define arrogance? what models released by them lately are wrong decisions? They are completely on par with fuel efficiency figures and Ford also beat Honda and Toyota in Quality with Gm not far behind.

They cannot be leaner and meaner because government forces them to pay higher wages and retirement pensions. They spend millions towards the society's welfare. Honda and Toyota dont do that.

With about 100,000 workers in factories with more in Supply and logistics, the big three are run by Americans and are not isolated companies. If Wall street gets 700 billion, why cant the big three get atleast 15 billion?

Can you define arrogance? what models released by them lately are wrong decisions? They are completely on par with fuel efficiency figures and Ford also beat Honda and Toyota in Quality with Gm not far behind.

Its too late for them to release the models which were supposed to be earlier decisions. What were the Big three doing when Japanese were releasing cars like Prius? Sleeping?? Coming to quality, it took 10 yrs for Hyundai to gain public trust in US atleast. Do you expect the customers to start immediately buying American cars bcos they just started improving on quality. Again were they sleeping when very own American customers were slowly switching over to Japanese cars. Dint it strike them why this was happening.

Quote:

Originally Posted by devarshi84

They cannot be leaner and meaner because government forces them to pay higher wages and retirement pensions. They spend millions towards the society's welfare. Honda and Toyota dont do that.

Its UAW that forces the higher wages and retirement plans, the govt of MI and few other states just mandates the auto industry to hire workers from UAW. Honda and Toyota have their factories in states that don't mandate the hiring to be done through UAW. Spending million in welfare, for who! My friend you need to look at your books, end of each year; how much you spend against your income. Honda and Toyota are still holding their jobs and I would say thats a big welfare.

Quote:

Originally Posted by devarshi84

With about 100,000 workers in factories with more in Supply and logistics, the big three are run by Americans and are not isolated companies. If Wall street gets 700 billion, why cant the big three get atleast 15 billion?

I dont even know where to start from, I feel you are holding their stocks! Just kidding. I didnt get what you meant by isolated companies? All the factories in US are run by Americans. If a factory doesn't produce what customers want then they should listen with their ears wide open!! Its very simple; you go to a restaurant, you dont like the food then you go to a different one next time. You dont see who's back in the kitchen cooking. As one of the congressmen said to these big three " take your future plans to a bank and see if they approve it".
People say we dont need a big government and that the industries should be independent and thats what drives America. But when things fail you need Government help. Pity..
Wall street is a big mess, thats the pillar of US financial system. Its not right to consider financial system with Auto Industry.

Most cars in the present lineup from the Big Three are complete pieces of crap. No doubt about that. Sure there are exceptions, but hey, if the people arent buying them, are consumer tastes at fault? I don't think so.

the american corpoeations are run by self-serving harvard dudes, i see no hope there. reminds me of micheal douglas speech in wallstreet movie! yes i would like the govt or banks to help them but only after putting in place a plan that makes them lean & mean. one thing is for sure, not many car buyers would miss them.

They cannot be leaner and meaner because government forces them to pay higher wages and retirement pensions. They spend millions towards the society's welfare. Honda and Toyota dont do that.

Agreed. Yes. This is what took them here. Also, the huge R&D cost for the military vehicles etc too contributed some here.

Quote:

Originally Posted by devarshi84

With about 100,000 workers in factories with more in Supply and logistics, the big three are run by Americans and are not isolated companies. If Wall street gets 700 billion, why cant the big three get atleast 15 billion?

I am in same opinion.
You bail out finance sector for them to provide more loans. But loans to whom? Only if the people are ready to take it. When they will? Only when they have a good job.

Only one of them does and that is Ford.
GM has been the one on the top of the world, this also means that it was the most likely to hit, but IMO they had sufficient opportunities to prevent this mess.

IIRC, from the begenning of this mellinium, i.e. from the year 2000-2002 onwards they ( specially GM ) were talking about a car being built-in-America. So they had some clue that things are not going to be good. They lost the built-in-America battle becasue some Japs, specially Toyota built more plants in US and started operating there. Hyundai too gave ads " Sonata now built-in-Xstate of US ". This was when the Japs came on rising.

But even then all of them were not focussing on the fuel efficiency market of US, say the segment from base to Honda Accord/Toyota Camry. The latest Malibu is the only serious contender GM had. Here again Ford is an exception that they were atleast attempting with a more serious heart.
Below this segment, again Ford is very famous with Focus. GM is present, but the reviews about Focus ( IIRC, still the chassis remain the same ) are generally more positive ( what I have read in many internatinal magazines ).

No attempts were made to make anything other than trucks and SUV based on those truck chassis. Japs had more reliable powertrains as compared to the big three. Its only recently that the big three have caught up. Here, the Japs still have upper edge. Another small but a very relative market is of diesel. GM tried its best to kill diesel,but eventually failed. VW has made some inroads in it. Merc, BMW and Audi are makign it tough for others.

The exception Ford has.
1) Making genuine attempts at the largest car segment of US with Tarus and again relaunching Tarus. Other attemtps were also made.

2) More deeper attempts in the lower segment to know what the customer wants. The reason they are able to sell Focus despite the car being old.

3) The truck segment is dominated by them, and the products are selling more. They are not average at every place. At some places they are above average.

4) Better vision on other markets has helped it remain competitive. Cars like Mustang helped Ford a lot specially related to image. GM and dodge soon followed, but could not take the plunge.

How many of us here have the capacity and experience to Run the worlds largest (now second largest possibly) car company where millions are spent and earned daily? The sales are proof enough that customers buy their cars and like them too. Its the operations that need to be more efficient.

It's not an easy decision to change the complete line-up in a matter of days or months for that matter. eliminating the line-up and creating new cars just adds to the cost by millions. I have seen GM do the best they can with their current crop of platforms.

They werent sleeping and that's the reason they still hold 47% of the marketshare in US. GM and FORD are still in the top five largest carmakers which is a no small feat in the largest dying economy. I have personally read the papers where GM was made the scapegoat of a recall while Toyota with the a similar number of recalls landed on the 3-4th page. who's to be blamed here?

Rick Wagoner has brought changes to GM which were very much needed. But it takes time for the implementation to work. The dude needs time and money and especially at the moment when they are almost about to kick back with newer cars.

The only trouble with the Big three is the way they handle the media and the image they have due to their lack of proper marketing.

And if we talk about the loan, the wall street people didnt even care to request for one. Who's to blame for the blunders they made in the real estate market? a 15-32 billion dollar loan for one of the largest employing sector compared to a whooping 700 billion dollar in my opinion is totally logical.

1) The sales are proof enough that customers buy their cars and like them too. Its the operations that need to be more efficient.

2) It's not an easy decision to change the complete line-up in a matter of days or months for that matter. eliminating the line-up and creating new cars just adds to the cost by millions. I have seen GM do the best they can with their current crop of platforms.

3) They werent sleeping and that's the reason they still hold 47% of the marketshare in US. GM and FORD are still in the top five largest car makers which is a no small feat in the largest dying economy. I have personally read the papers where GM was made the scapegoat of a recall while Toyota with the a similar number of recalls landed on the 3-4th page. who's to be blamed here?

4) Rick Wagoner has brought changes to GM which were very much needed. But it takes time for the implementation to work. The dude needs time and money and especially at the moment when they are almost about to kick back with newer cars.

5) The only trouble with the Big three is the way they handle the media and the image they have due to their lack of proper marketing.

6) And if we talk about the loan, the wall street people didnt even care to request for one. Who's to blame for the blunders they made in the real estate market? a 15-32 billion dollar loan for one of the largest employing sector compared to a whooping 700 billion dollar in my opinion is totally logical.

1) IMO, reasonable amount of sales are coming from people who dont want to see them die. I know that American car buyers are not from those who would do this, but lately this is a possibility specially after GM lost the NO.1 manufacturer of cars.
Also take out the European division of Opel and sales from Ford Europe. They are also dependent of this.

2) This could have been faster in the first place. They were very late to initialize the new line up of cars. And now when they first went to ask for money, they went in their private jets. They were shown the door. Then government asked to prove that they will come out of the crises and the money would be well spent. The presentation turned the story towards a negative end. All three of them were not able to provide any plans through which they can be more secure. Ford said Electric vehicles were the way ahead, etc. But no one specifically mentioned any concrete data that they are in phase of developing some compact FE car or new engine technology or more refine petrol-electric hybrid. To impress others, GM CEO used Volt ( specially built ) and Ford CEO went in some SUV hybrid car. This was sufficient to stall the relief package.

3) With regard to sales, its upto some extent " I will buy American ". And yes Toyota had trouble. I don't remember how many times the entire engines were to replaced in trucks as recall. Tundra had to do this.

4) Again same as point 2, they were too late to even start the development. Ford was somewhat faster and hence it is the healthiest state out of the three.

5) More than that. Point 2.

6) Nobody is 100% correct. When demanded with concrete proof, the big three failed.

Other than this I feel that Ford could have been out of trouble and would still be no. 2 manufacturer if Ford, in a very timely fashion offered its European range to US. US has been drooling over the Focus, Fiesta and other cars sold there and even after n number of requests ford still has not put in the line. IMO, if the move was made earlier, Ford would be in much healthier condition.

It is a really bad economic situation right now. Toyota, even though it is rated as one of the best managed company, is expecting a $1.7 billion loss in this quarter for the first time in so many years. They have announced salary/bonus cuts and may also lay off some of their workers by next year, even though its not their tradition.

So we can only pray for the big 3 in Detroit. GM was already in trouble before this economic downturn started this year.